SBA 7(a) Q&A
Short answer
Yes, SBA 7(a) working capital can be used to pay off existing non-SBA business credit card debt of the acquired entity, provided it is incurred for eligible business purposes prior to closing.
Working capital funds from an SBA 7(a) loan can be used for a variety of business purposes, including paying existing business debts that are not being refinanced as part of the primary SBA loan. This helps improve the acquired business's balance sheet and cash flow immediately post-acquisition. The lender will verify that the credit card debt was indeed for legitimate business expenses.
The business you are acquiring has $20,000 in outstanding credit card debt used for inventory purchases. Your SBA 7(a) loan includes a $50,000 working capital component. You can use $20,000 of that working capital to pay off the existing credit card debt after closing.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on working capital
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day